PENSION PLANS AND OTHER BENEFITS
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Dec. 31, 2012
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PENSION PLANS AND OTHER BENEFITS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION PLANS AND OTHER BENEFITS |
The Company has a defined benefit pension plan for certain of its U.K. employees. Benefits of this plan are based on a combination of years of service and compensation levels. This plan was closed to new participants in 1992. Beginning December 1, 2008, future benefits ceased to accrue for the remaining active employee participants in the plan concurrent with the establishment of a defined contribution plan for these employees. In 2011, the Company offered all non-retired members of the U.K. Pension (the "Plan") the opportunity to transfer their accrued benefits out of the Plan in return for an enhancement to their transfer value. The transfer extinguishes the Plan's liabilities to those members who elected this option. In 2011, the Company made transfers for 14 members of the Plan. In connection with this transfer, the Company has recognized in its consolidated statements of operations approximately $2.3 million of settlement charges for 2011. In addition, the Company amended the Plan to allow retired members an additional option in the calculation of their annual benefit payments. The Company's U.K. pension fund investment strategy is to maximize return on investments while minimizing risk. This is accomplished by investing in high-grade equity and debt securities. The Company's portfolio guidelines recommend that equity securities comprise approximately 75% of the total portfolio and that approximately 25% be invested in debt securities. Investment strategies and portfolio allocations are based on the plan's benefit obligations and its funded or underfunded status, expected returns, and the Company's portfolio guidelines and are monitored on a regular basis. In 2012 and 2011, the plan's investments consisted of larger percentages of bond funds as the Company continued to evaluate the investment climate. The weighted-average asset allocations by asset category are as follows:
The fair value of the Company's pension plan assets at December 31, 2012 and 2011 by asset category (see Note 13 for a discussion regarding fair value measurements) are as follows (in millions):
As of December 31, 2012 and 2011, amounts recognized in accumulated other comprehensive income, net of tax, consisted of actuarial net losses of $9.6 million (including $11.8 million of accumulated loss less prior service cost of $2.2 million) and $5.3 million (including $7.4 of accumulated loss less prior service cost of $2.1), respectively. During 2012, the amounts recognized in accumulated other comprehensive income (loss), net of tax, consisted of actuarial net losses of $(4.5) million, amortization of loss of $0.8, amortization of prior service cost $(0.1) and foreign exchange of $(0.5). During 2011, the amounts recognized in accumulated other comprehensive income (loss), net of tax, consisted of actuarial net gain of $4.2 million, prior service cost of $2.2 million, amortization of loss of $1.4 million, settlement gains of $1.3 million and foreign exchange of $(0.3) million. During 2010, the amounts recognized in accumulated other comprehensive income (loss), net of tax, consisted of actuarial net losses of $(0.8), amortization of loss of $1.4 million and foreign exchange of $0.6 million. The Company expects to recognize approximately $1.8 million ($1.9 million of amortization of loss less $0.1 million of prior service cost) of losses from accumulated other comprehensive income as a component of net periodic benefit cost in 2013. Total net periodic benefit cost in 2013 is expected to be $2.0 million. The assumptions used in determining pension information for the plans for the years ended December 31 were as follows:
The overall expected long-term rate of return on plan assets is a weighted-average expectation based on the targeted and expected portfolio composition. The Company considers historical performance and current benchmarks to arrive at expected long-term rates of return in each asset category. The Company determines its discount rate based on a forward yield curve for a portfolio of high-credit-quality bonds with expected cash flows and an average duration closely matching the expected benefit payments under the plan. The Company's funding policy is to make the minimum annual contributions required by applicable regulations or agreements with the plan administrator. Management expects total contributions during 2013 will be approximately $1.6 million. In addition, the Company may periodically make contributions to the plan based upon the underfunded status of the plan or other transactions, which warrant incremental contributions in the judgment of management. The U.K. pension plan includes a provision whereby supplemental benefits may be available to participants under certain circumstances after case review and approval by the plan trustees. Because instances of this type of benefit have historically been infrequent, the development of the projected benefit obligation and net periodic pension cost has not provided for any future supplemental benefits. If additional benefits are approved by the trustees, it is likely that an additional contribution would be required and the amount of incremental benefits would be expensed by the Company. The Company expects to pay the following benefit payments (in millions), which reflect expected future service, as appropriate:
The following table sets forth pension obligations and plan assets for the Company's defined benefit plans (based on a December 31 measurement date in 2012 and 2011), as of December 31 (in millions):
The underfunded status of the defined pension plan, which was recorded in the consolidated balance sheets, included $1.6 million in accrued expenses and $5.9 million in noncurrent liabilities in 2012, and $1.6 million in accrued expenses and $1.4 million in noncurrent liabilities in 2011. The accumulated benefit obligation for the defined benefit pension plan was $69.6 million and $61.8 million as of December 31, 2012 and 2011, respectively. The accumulated benefit obligation is in excess of the plan's assets. The vested benefit obligation calculated is the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee's expected date of retirement. The components of net pension expense were as follows for the years ended December 31 (in millions):
The Company has defined contribution and pre-tax savings plans ("Savings Plans") for certain of its employees. Under each of the Savings Plans, participants are permitted to defer a portion of their compensation. Company contributions to the Savings Plans are based on a percentage of employee contributions. Additionally, certain of the Company's Savings Plans have a profit sharing feature for salaried and non-union hourly employees. The Company contribution to the profit-sharing feature is based on the employee's age and pay and the Company's financial performance. Expense attributable to all Savings Plans was $5.3 million, $7.3 million and $6.3 million for the years ended December 31, 2012, 2011 and 2010, respectively. The Savings Plans include a non-qualified plan for certain of its executive officers and key employees who are limited in their ability to participate in qualified plans due to existing regulations. These employees are allowed to defer a portion of their compensation, upon which they will be entitled to receive Company matching contributions as if the limitations imposed by current U.S. regulations for qualified plans were not in place. The Company's matching contributions are based on a percentage of the employee's deferred salary, profit sharing contributions and any investment income (loss) that would have been credited to their account had the contributions been made according to employee-designated investment specifications. Although not required to do so, the Company actually invests amounts equal to the salary deferrals, the corresponding Company match and profit sharing amounts according to the employee-designated investment specifications. As of December 31, 2012 and 2011, investments in marketable securities totaling $6.0 million and $6.3 million, respectively, were included in other noncurrent assets with a corresponding deferred compensation liability included in other noncurrent liabilities in the consolidated balance sheets. Compensation expense recorded for this plan totaled $1.0 million, $0.2 million and $0.7 million for the years ended December 31, 2012, 2011 and 2010, respectively, including amounts attributable to investment income (loss) of $0.7 million, $(0.1) million and $0.6 million, respectively, which is included in other, net in the consolidated statements of operations. |